Part IV: Agency

Question 1

agency agreement

Answer 1

when one party designates another to act on his/her behalf

Question 2

principal

Answer 2

party who hires agent

Question 3

agent

Answer 3

party who acts on behalf of principal

Question 4

Is a written agreement necessary to create an express agency relationship?

Answer 4

No, unless:

1. the contract being entered into falls under the Statute of Frauds.
2. OR, if the agency relationship cannot reasonable be completed w/in 1 yr.
3. capacity.

Question 5

capacity & agency relationship

Answer 5

An agency relationship terminates as soon as either of the agent or principal is adjudicated incompetent.

Question 6

Does an agency relationship require consideration?

Answer 6

No.

Question 7

principal ratification w/out express or implied authoity

Answer 7

The principal is required to ratify the contract before it is binding.

Question 8

apparent authority

Answer 8

comes from how the agent is viewed by 3rd parties when the principal does nothing to correct the appearance of authority.

Question 9

principal ratification when agent enters contract w/principal’s identity undisclosed

Answer 9

1. principal is not known does not have to ratify the contract to be held liable.
2. The principal can only be sued if his/her identity is discovered. Otherwise, only the agent can be sued.

Question 10

principal ratification when agent enters contract w/out authority on behalf of a principal

Answer 10

the principal must know all material facts in order to ratify the contract

Question 11

principal ratification when agent commits a tort while working for a principal in the manner in which they were hired

Answer 11

the principal will be liable.